Under-NT$40,000 TV may spark price war

Hon Hai Precision Industry Co. Ltd., yesterday kicked off its cooperation with Chunghwa Telecom and Kbro Co. Ltd., a leading cable TV system operator, to introduce its 60-inch LED TV sets onto the local market at a unit price of under NT$40,000 — a move that will trigger a domestic price war for large-sized TV sets, according to market sources.

At a press conference held yesterday afternoon, Chunghwa Telecom, the largest telecom carrier in Taiwan, announced that both current and new subscribers of its multimedia-on-demand (MOD) services will be allowed to purchase 60-inch high-definition (HD) LED TV sets at a preferential price of only NT$38,800, but the TV sets should be tied down with a two-year contract for utilizing the 4M broadband access network service plus MOD service, with a minimum monthly charge of NT$1,158 during the contract period.

Meanwhile Kbro, which offers broadband cable TV services in Taiwan, also announced at noon yesterday two optional programs for customers to choose from if they want to bring home the Hon Hai-made 60-inch HD LED TV set at a unit price of NT$38,800.

One is that they should be tied down with a two-year contract to Kbro's broadband access service and digital TV service with a monthly rental of NT$768 to NT$1,058, and pay six months of rental in advance.

The other is for customers to be tied down with a three-year contract for using the firm's Super MOD service at a monthly charge of NT$299, and pay a one-year rental in advance.

Hon Hai's cooperation with Chunghwa Telecom and Kbro to promote its 60-inch HD LED TV sets in the domestic market is seen as potentially triggering a price war for large-sized TV sets among major dealers in Taiwan.

Tsann Kuen Group, a major dealer of household electrical and electronic appliances, yesterday decided to sell 55-inch Vizio-branded LED TVs at a unit price of only NT$29,999, while E-Life Mall, another dealer in the line, yesterday kicked off a five-day sales campaign for Chimei's 3D digital 50-inch LED TV sets at a unit price of NT$29,900.

Also yesterday, Hon Hai's Vice Chairman Tai Jeng-wu said that his company plans to ship 3 million 60-inch LED TV sets per year as it has increased capacity at its TV panel factory, which is being run in partnership with Sharp Corp. of Japan.

The Sakai plant in western Japan can produce 6 million 60-inch TV panels per year, half of which will be used in LED TVs assembled by Hon Hai, while the remaining units will be delivered to Sharp, Tai said at a press conference in Taipei to launch Hon Hai's 60-inch TVs.

The Sakai plant is currently at 70-percent capacity and will increase in 2013, Tai added.

Sakai Display Products, the operator of the Sakai plant that makes the world's most advanced 10th generation panels, is expected to break even in the fourth quarter of this year thanks to increasing capacity at the plant, he said.

Hon Hai, the main manufacturer of Apple Inc. products, earlier this year acquired a roughly 10-percent stake in Sharp at a cost of US$800 million, becoming the largest shareholder in the Japanese company.

As part of the deal, Gou agreed to acquire a 46.5-percent stake in the Sakai plant for an additional US$800 million and obtained three seats on the board of directors.